Tesla relaunches Glencore’s Congolese cobalt

Stake : securing a reliable supply of cobalt to support the development of electric cars.
The Congolese cobalt industry could soon be relaunched thanks to the increased needs of the American car manufacturer Tesla, whose operations at the Mutanda mine have been suspended at the end of 2019. The group, which specialises in electric vehicles, has, according to the economic daily Financial Times, approved an agreement with the mining company Glencore to supply cobalt to its new battery plants.

This partnership, which has yet to be officially confirmed by the two companies concerned, should, according to sources quoted by the British business daily, result in the purchase of 6,000 tonnes of cobalt per year to meet the needs of the American firm’s new lithium-ion battery production units based in Shanghai (China) and Berlin (Germany). This volume will come primarily from the two Congolese mining sites owned by the Swiss raw materials giant, with the Central African country alone accounting for 60% of the world’s cobalt supply.

The stakes are, admittedly, high. A recent study by the consulting firm Boston Consulting Group (see graph below) estimates that the market share of electric and hybrid cars in total world car sales will increase from 8% in 2019 to…51% in 2030. A change of scale – and paradigm shift – that will profoundly shake up the automotive industry and its raw material suppliers. However, the alternatives to cobalt (especially Congolese) in the manufacture of batteries have so far not really been conclusive, the efficiency of a lithium-iron-phosphate configuration, for example, being significantly lower than the traditional lithium-ion (with cobalt). For Tesla, which is expected to increase its capacity sevenfold within ten years, it was therefore imperative to secure a reliable, long-term supply from Glencore, the world’s leading industrial cobalt supplier. Aware of the bad reputation surrounding Congolese cobalt, however, Tesla noted in a recent report that it recognizes « the higher risks of human rights issues in cobalt supply chains, particularly child labour in the Democratic Republic of Congo (DRC) … » and that, as a result, « a significant effort will be made to establish processes to remove these risks from the supply chain ». Acknowledged.

Electric cars, a fast-growing market: share of electric and hybrid vehicle sales as a % of total sales worldwide
Source: Boston Consulting Group

Read also: On the lookout, Trafigura seeks to invest in the Congolese cobalt industry
Read also: Zambia: Mopani Copper Mines, a subsidiary of Glencore, reduces its activity
See also: Meeting with… Marie Chantal Kaninda (DRC) – Executive Director of Glencore DRC